Deadline now Oct 14 for InBev to make offer for SAB in year’s biggest deal

by

By Ruth David and Aaron Kirchfeld

(Bloomberg) — The world’s largest brewer wanted to keep the biggest deal of the year under wraps. Market chatter and the U.K.’s unique takeover rules got in the way.

The Takeover Panel forced SABMiller Plc to release a statement about an approach from larger rival Anheuser-Busch InBev NV after speculation on Tuesday sent London-based SABMiller’s shares up as much as 4.1 percent, according to two people with knowledge of the matter, who asked not to be identified because the information is private.

A barman pours a beer produced by brewing company SAB Miller at a bar in Cape Town, September 16, 2015. Anheuser-Busch InBev has approached rival SABMiller about a takeover that would form a brewing colossus producing a third of the world's beer. A merged group would have a market value of around $275 billion (£177 billion) at current prices, and would combine AB InBev's dominance of Latin America with SABMiller's dominance in Africa, both fast-growing markets, as well as their breweries in Asia. REUTERS/Mike Hutchings
A barman pours a beer produced by brewing company SAB Miller at a bar in Cape Town, September 16, 2015. Anheuser-Busch InBev has approached rival SABMiller about a takeover that would form a brewing colossus producing a third of the world’s beer. A merged group would have a market value of around $275 billion (¬£177 billion) at current prices, and would combine AB InBev’s dominance of Latin America with SABMiller’s dominance in Africa, both fast-growing markets, as well as their breweries in Asia. REUTERS/Mike Hutchings

The disclosure triggers a 28-day timeline for a formal, fully financed bid. Known as the put-up-or-shut-up rule, if AB InBev decides to walk away from the transaction it can’t come back for six months.

Stringent rules on disclosure require a company to confirm or deny any hint of a deal, whether that comes from an anonymously sourced news article or unusual stock movement. The Takeover Panel, the world’s oldest acquisition oversight body, introduced the rules in 2011, affecting deals by companies including Pfizer Inc. and Glencore Plc.

“Media attention following disclosure of deal negotiations can be disruptive to the companies, and can kill an otherwise valuable deal” said John Coates, professor of law and economics at Harvard University.

Of the $1 trillion in acquisitions of U.K. companies announced since September 2011, when the new rules came into effect, $166 billion have been terminated or withdrawn, according to data compiled by Bloomberg.

Refuse Comment

The U.K.’s rules are more stringent than in the U.S., where companies aren’t subject to disclosure requirements and can simply refuse to comment on speculation or stock moves.

The Anheuser-Busch InBev logo is seen outside the brewer's headquarters in Leuven, Belgium in this February 26, 2014 file photo. Anheuser-Busch InBev has approached rival SABMiller about a takeover that would form a brewing colossus which makes around a third of the beer consumed globally. Belgium's AB InBev - the world's biggest brewer - makes Budweiser, Stella Artois and Corona, while Britain-based SABMiller - the No. 2 player - owns Peroni, Grolsch and Pilsner Urquell beers. REUTERS/Francois Lenoir/Files
The Anheuser-Busch InBev logo is seen outside the brewer’s headquarters in Leuven, Belgium in this February 26, 2014 file photo. Anheuser-Busch InBev has approached rival SABMiller about a takeover that would form a brewing colossus which makes around a third of the beer consumed globally. Belgium’s AB InBev – the world’s biggest brewer – makes Budweiser, Stella Artois and Corona, while Britain-based SABMiller – the No. 2 player – owns Peroni, Grolsch and Pilsner Urquell beers. REUTERS/Francois Lenoir/Files

“Bidders are reluctant to start a process because of the rules,” said Coates.

That was not the case with AB InBev and its long-awaited pursuit of SABMiller. AB InBev Chairman Olivier Goudet contacted his counterpart at the smaller brewer, Jan du Plessis, this week to propose discussions on a potential deal, people familiar with the matter said on Wednesday.

No proposal has yet been received and there can be no certainty that an offer will be made, SABMiller said in a statement. ABI InBev now has till 5 p.m. on Oct. 14 to make an offer or announce it doesn’t intend to proceed. SABMiller may also ask the panel for an extension.

BizNews

GoHighLevel
gohighlevel gohighlevel login gohighlevel pricing gohighlevel crm gohighlevel api gohighlevel support gohighlevel review gohighlevel logo what is gohighlevel gohighlevel affiliate gohighlevel integrations gohighlevel features gohighlevel app gohighlevel reviews gohighlevel training gohighlevel snapshots gohighlevel zapier app gohighlevel gohighlevel alternatives gohighlevel pricegohighlevel pricing guidegohighlevel api gohighlevel officialgohighlevel plansgohighlevel Funnelsgohighlevel Free Trialgohighlevel SAASgohighlevel Websitesgohighlevel Experts